Which of the Following Is an Example of a Fixed

question 42

Multiple Choice

Which of the following is an example of a fixed cost?

• A)power cost in the machining department
• B)wood in the manufacture of furniture
• C)labour cost paid on a piece basis
• D)lease payments on machinery

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Definitions:

Note Payable

A written promise to pay a specific sum of money, on demand or at a set time, to the holder of the note.

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date, including principal and any remaining interest.

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its interest payments on outstanding debt.

Operating Expenses

The ongoing costs for running a business, excluding the cost of goods sold, such as rent, utilities, and salaries.